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Legal Issues Cloud Storage – Are you complying?

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An increasing number of consumers are using cloud storage to hold data (such as photographs and personal documents) that would traditionally have been held on a personal computer.

At the same time the legal and regulatory landscape around cloud storage is also in constant flux. It is important to understand the security implications and legal issues surrounding cloud storage - how data is stored, managed and transferred and especially, with regards to consumer data, how it is protected. These concerns and the legal issues for cloud storage are now undergoing a review.

On 1 December 2015 the Competition and Markets Authority (“CMA”) launched a review of how the cloud storage sector could be affected by consumer law.

Cloud storage is becoming an increasingly popular way for consumers to store their music, photographs and documents via the internet. According to Nisha Arora, a Senior Director of CMA, “cloud storage is a dynamic and growing sector”, it has been estimated that 40% of adults in Great Britain now use cloud storage providers.

The CMA is aware of consumer concerns surrounding businesses using practices and terms that may breach consumer law, including unexpected price increases and unlimited storage capacity deals having been changed or reduced significantly after contracts have been agreed. There have also been reports about consumers’ data being lost or deleted, and consumers not being able to access their data.

According to the CMA the review will consider these practices “in order to understand how widespread these issues are, whether they breach consumer protection law and how they are affecting consumers”.

The CMA are welcoming feedback from consumers and industry experts until 15 January 2016 in relation to their experiences and also from businesses regarding their current practices “to assess whether companies understand and comply with consumer law and whether cloud storage services are working well for consumers as a result.”

Any breaches of consumer protection uncovered by this review will lead to further action by the CMA. Such action could be to take enforcement measures under its consumer law powers, obtain voluntary compliance from cloud storage suppliers or issues guidance to businesses or consumers.

If you have any questions or concerns regarding legal issues and cloud storage as a business or consumer then please contact the Clarion Commercial Team on 0113 246 0622

Disclaimer: Anything posted on this blog is for general information only and is not intended to provide legal advice on any general or specific matter. Please refer to our terms and conditions for further information. Please contact the author of the blog if you would like to discuss the issues raised.